First Offshore Wind Farm Wins Approval

Victory for Alternative-Energy Industry Follows Years of Delays; Critics Warn of an Eyesore in the Making in Nantucket Sound

By

Stephen Power And

Mark Peters

Updated April 29, 2010 12:01 a.m. ET

WASHINGTON—The Obama administration Wednesday approved what would be the nation's first offshore windmill farm, delivering a major victory for the wind energy industry after years of delays.

The Cape Wind project, approved by Interior Secretary Ken Salazar, would occupy a 25-square-mile section of Nantucket Sound and generate enough energy to power over 200,000 homes in Massachusetts. But the project could still face financial and legal challenges.

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Speaking to reporters Wednesday, Jim Gordon, president of closely held Energy Management Inc., said his firm's next steps will include talks with European and American banks to put together financing. Mr. Gordon said his group will look for "other opportunities" along the East Coast.

First proposed in 2001, the Cape Wind project has been watched closely by other offshore developers. Offshore projects already are operating in Europe, while analysts expect the U.S. to see some development in the coming decade, focused mostly in the Northeast.

The Cape Wind proposal has been reviewed by more than a dozen state and federal agencies for nearly a decade, and has become a symbol of the challenges faced by large-scale "clean energy" developments. Many people who support the idea of renewable energy often don't want the hardware for such projects—huge wind turbines and sprawling solar panel arrays—in sight of their homes.

Supporters have said the wind farm will deliver annual reductions in greenhouse-gas emissions equivalent to taking 175,000 cars off the road, while allowing Massachusetts to tap a vast energy resource that doesn't consume water or discharge waste.

Opponents—including members of the Kennedy family, whose historic compound overlooks Nantucket Sound—say the project will mar the sound, a popular summer playground, and interfere with fishing and recreation.

ENLARGE

Aerial view of the offshore energy park Alpha Ventus in the North Sea, revving up to begin energy production
Reuters

Within hours of the decision, a coalition of groups announced their intention to sue the Interior Department, alleging the government's approval of the project violates environmental laws and laws protecting the rights of Indian tribes in the area.

Mr. Salazar approved the project despite a federal advisory council's recommendation that it be rejected because of the potentially "destructive" impact on the local scenery. The project site is about 5.2 miles from the mainland shoreline, 13.8 miles from Nantucket Island and nine miles from Martha's Vineyard.

Mr. Salazar attached conditions: The project can have only 130 turbines, rather than the 170 that had been planned, and must take additional steps to minimize the extent to which the wind turbine towers clutter what are now vistas of open water. Interior officials said they would require the turbines be painted off-white to reduce contrast with the sea and sky, yet remain visible to birds. The department is requiring additional archeological reviews, in response to concerns raised by the Wampanoag Tribe of Gay Head and the Mashpee Wampanoag Tribe.

Cape Wind still must secure an agreement for the sale of the power, with the developer currently negotiating an agreement with National Grid PLC. The higher price of power from offshore wind farms has stymied other projects in the eastern U.S.

The current estimated cost of a fully installed offshore wind system is $4,600 a kilowatt, almost double the $2,400-a-kilowatt cost for a land-based system, according to the U.S. Offshore Wind Collaborative, an organization of public and private institutions that exists to promote the offshore wind industry.

ENLARGE

Reaction to the decision didn't fall along partisan lines. Sen. Scott Brown (R., Mass.) and Democratic U.S. Rep. William Delahunt, who represents Cape Cod, criticized Mr. Salazar's decision. Mr. Delahunt predicted it would lead to "a new chapter of legal battles," and Mr. Brown said it would lead to job losses in Cape Cod's tourism and fishing industries.

IHS Emerging Energy Research forecasts U.S. offshore wind development will reach 8,200 megawatts of capacity by 2025, while onshore projects will reach 192,000 megawatts, compared with 35,279 megawatts at the end of 2009.

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